Major Averages Pull Back Into The Red After Seeing Initial Strength

(RTTNews) - After moving higher at the open, stocks have come under pressure over the course of early trading on Wednesday. The major averages have pulled back into negative territory, extending the notable downward move seen in the previous session.

The weakness that has emerged on Wall Street is partly in reaction to comments by Federal Reserve Chair Janet Yellen, who warned about high stock valuations.

"I would highlight that equity market valuations at this point generally are quite high," Yellen said during a discussion with International Monetary Fund Managing Director Christine Lagarde. "There are potential dangers there."

Yellen also noted that there could be a sharp jump in long-term rates when the Fed eventually begins raising interest rates.

Traders are also reacting to a report from payroll processor ADP showing that private sector employment increased by much less than expected in the month of April.

Electronic storage stocks have shown a significant move to the downside in early trading, dragging the NYSE Arca Disk Drive Index down by 2.1 percent.

DataLink (DTLK) is leading the storage sector lower after reporting weaker than expected first quarter results and providing disappointing second quarter guidance.

Gold and software stocks have also moved notably lower on the day, while energy stocks are moving higher along with the price of crude oil.

In recent trading, the major averages have bounced off their lows for the young session, but they currently remain in the red. The Dow is down 55.15 points or 0.3 percent at 17,873.05, the Nasdaq is down 10.89 points or 0.2 percent at 4,928.44 and the S&P 500 is down 2.54 points or 0.1 percent at 2,086.92.